CRST adds last-mile delivery to US truckload services

CRST adds last-mile delivery to US truckload services

CRST acquired NAL Group, giving it direct access to consumer-driven last-mile logistics. Photo credit: Ari Ashe.

Trucking provider CRST International is adding final-mile delivery to its portfolio of truckload and logistics services by acquiring NAL Group, the owner of North American Logistics and Install LLC, CRST said Monday. The acquisition, terms of which were not disclosed, gives CRST final-mile warehousing, delivery, and in-home assembly and installation capabilities for heavier goods.

The deal also makes CRST — the eighth-largest US truckload carrier, according to SJ Consulting Group — the latest freight trucking company to add final-mile services to its portfolio, as the continuing growth of online shopping creates more demand for home delivery of heavy appliances and other goods. It’s a highly valued niche, but a difficult one for freight carriers.

“NAL Group will allow CRST to enter the complex in-home installation and assembly market with existing customers as well as with an expanded customer base in the US and Canada,” Hugh Ekberg, president and CEO of CRST International, said in a statement. “For CRST and NAL Group customers, it means new niche service offerings and scalable capacity not previously available.” NAL has more than 40 US locations.

High-profile retailers are among the biggest customers of NAL Group. According to the company, those customers include Best Buy, Target, and IKEA, as well as e-commerce retailer Wayfair. The Edison, New Jersey-based company delivers, assembles, or installs items such as furniture, appliances, exercise equipment, and electronics.

Through the acquisition, CRST will gain new customers and deeper inroads into the supply chains of existing retail customers.

CRST said NAL will complement its other services, which beyond dry-van, refrigerated, and flatbed truckload include expedited, dedicated, and specialized transportation. “CRST’s profitable growth has been built with the successful acquisition and integration of quality companies,” Ekberg said.

Over the past several years, CRST has acquired Specialized Transportation, Allied Special Products, BESL Transfer Company, Pegasus Transportation, and Gardner Trucking, giving the Cedar Rapids, Iowa-based company eight operating subsidiaries before the NAL transaction. NAL itself was created by the merger of North American Logistics and Installs in February 2018.

Last mile becomes the first choice

In an increasingly crowded and competitive market, last-mile logistics has become the front line in the battle for e-commerce freight. Truckload, less-than-truckload (LTL), logistics, and parcel operators are all jostling for position in the race to the US consumer’s driveway. At a time of slow growth or slack freight demand, the last mile comes first in the minds of many trucking operators.

An increasingly large number of oversized items from home appliances to gun safes to garden furniture are being purchased online. These sales can go far beyond swing sets and big-screen televisions. For example, a small business could order a 2,500-pound Shop Fox W1756 wide-belt sander costing more than $15,000 through Amazon, and Prime members would get  “free shipping” on the item.

The final-mile market in recent years has drawn trucking and logistics companies such as Werner Enterprises, XPO Logistics, J.B. Hunt Transport Services, Ryder System, and Schneider National. LTL carriers have also ventured into the final mile. But freight carriers have found front-door deliveries and loading docks are miles apart, operationally speaking.

Schneider, the third-largest US truckload operator, pulled the plug on its final-mile venture last August, three years after jumping into the business through the acquisition of Watkins & Shepard, an LTL operator focused on furniture delivery, and Lodeso, a technology firm in the last-mile business. The carrier cited difficulties with cost, volume, and density as the primary reasons for its decision.

Acquiring a successful last-mile company, such as NAL Group, that can be easily paired with existing operations to spark growth, is the goal of many carriers. Last-mile logistics requires different equipment, different labor skills, and different technology than freight-oriented truckload and LTL business models. A different level of customer relations is required as well.

CRST’s acquisition of NAL Group indicates the last-mile market will rank high on the list of trucking growth strategies in a year when the only things certain are death, taxes, and e-commerce sales.

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy.